TradeWinds – Neapolitan owners pull back from the abyss

Despite facing existential threats on several fronts, optimism still reigns in the toughest of times

23 ott 2015, by Ian Lewis Naples

At 89 years old, Giuseppe D’Amato has seen more ups and downs in the shipping markets than most people.

But “Peppino”, as he is known by his Italian friends, is worried about the way in which the ongoing crisis is threatening the livelihood of the close-knit Neapolitan shipping community.

Naples is suffering; what was one of the greatest shipowning centres in southern Europe a decade ago has shrunk in scale as owners struggle to survive.

Several high-profile names, led by Deiulemar, have fallen by the wayside, while the tough operating environment and ongoing inquiries into the tax affairs of local owners raises questions over the future of others.

Speaking on the sidelines of the Naples Shipping & the Law conference, the patriarch of Perseveranza di Navigazione spelled out the need to address the problem of oversupply in the dry bulk market.

He blames banks for causing the ongoing crisis and providing financing at “exceptional conditions”.

‘speculators’ blamed

Even today — when it may be opportune to finance secondhand acquisitions — “speculators” are backing newbuildings and making the crisis worse, he says.

Companies are selling ships for less than they cost in the knowledge that the growing number coming into the market means the situation will not get better.

D’Amato says owners are fighting to resolve the crisis. At the conference he made a plea for action, suggesting that older vessels should not be covered by protection-and-indemnity (P&I) clubs, perhaps by them refusing to accept ships over 20 years of age.

The proposal fell largely on deaf ears, with P&I brokers citing competition concerns and classification societies suggesting it is the responsibility of the International Maritime Organization (IMO).

Others, including shipowner Mariella Bottiglieri argued it is not for insurance companies to turn down high premiums to cover older vessels but that “greedy private-equity” funds should get out of the market. “I just hope they get out without damaging the market,” the managing director of Giuseppe Bottiglieri Shipping said on the sidelines of the conference.

Like Peppino, Bottiglieri agrees that the secondhand market should be the way forward for private-equity firms and criticises their need to order newbuildings.

“Why do you need to place another order?” she asked rhetorically. “Because its easier to tell a nice Cinderella story to the hedge fund behind you [that you’re buying a new vessel that no one has ever had before].”

Mariella, who along with sisters Alessandra and Manuela represent the sixth generation of a shipowning family, believes the traditional family company has learned to ride the tough times.

“The strategy of a family business — unlike private equity — is very long term,” she said. She argues that the entrance of private equity into shipping markets filled a void left by banks but that the return of some banks to the market provides hope.

“It seems that banks are now back financing. That’s good news if it means private equity is going to get out — but on which conditions are they there financing?” she said.

The burden of responsibility of younger shipowners is felt by 37-year-old Andrea Garolla di Bard, who heads up the young shipowners’ (Giovani Armatori) section of Italian shipowners’ association Confitarma and helps run his family’s bunker and offshore operator, Med Offshore. Helping the business through the tough times is “a question of honour” that will require some adapting but Neapolitan shipowners will survive, he says.

“Shipowners are facing a difficult time because certain sectors are suffering,” he said. “But I still believe that their strong know-how will enable them to survive.”

The focus of the Naples shipping community will move ownership of vessels to a knowledge-based economy.

“Probably we will see a different scenario where the shipowners will not own 100% of their vessels, which may be held by other stakeholders and financing parties participating in investments, but with their know-how I believe they have the strength to gather money and equity,” he said.

Faith in shipping tradition

That view is shared by Confitarma president Emanuele Grimaldi, who says the key to Naples’ future will be its shipping tradition.

“The know-how that exists in this town is enormous,” he said.

Over 40% of the Italian tonnage is owned by Neapolitan owners, helping develop expertise in neighbouring towns like Sorrento (including Gianluigi Aponte), Torre del Greco and Monte di Procida.

Grimaldi expects that Neapolitan shipping will become more of a multinational business, where the flag and ownership of tonnage are not necessarily the same nationality.

The above comments come as some owners show disenchantment with the Italian flag, described by Bottiglieri as one of the least competitive in the world. If the bureaucratic and operational problems of operating under the Tricolore are not ironed out, owners will show no sentimentality with regards to flagging out, she says.

“Our aim is not to preserve Italy. Our aim is to preserve the company. And if the Italian flag is not competitive its not the shipowners’ fault,” she said.

Others are confident Neapolitan owners will survive the crisis. Perseveranza managing director Angelo D’Amato says people may be scaling down but he does not believe that lengthy bankruptcy procedures are likely in the coming months.

Several Neapolitan companies, including his own, are poised to sign agreements with the banks that should ensure their survival, he says. If that comes to fruition, it will explain the optimism that reigns in the toughest of times.

Link: http://www.tradewindsnews.com/weekly/375198/neapolitan-owners-pull-back-from-the-abyss